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Income Tax Appellate Tribunal, PUNE BENCH, ‘C’ PUNE
Before: SHRI R.S. SYAL & SHRI S.S. VISWANETHRA RAVI
This appeal by the Revenue is directed against the order passed by the CIT(A) on 08-02-2017 in relation to the assessment year 2010-11.
The only ground effective raised by the Revenue in the appeal is as under :
“On the facts and circumstances of the case, the CIT(A) has erred in holding that intra groups activities performed by Nalco US under SA and by Nalco Pacific under the RMASA constitute intra group services and the said activities are not in the nature of stewardship activity”.
Briefly stated, the facts of the case are that the assessee filed its return declaring total income of Rs.9,78,44,129/-. The international transactions of receipt of Headquarter services from Nalco, USA and Management Assistance services from Nalco Pacific Pte Ltd., Singapore totaling worth Rs.17,21,93,000/- were reported. The Assessing Officer (AO) made a reference to the Transfer Pricing Officer (TPO) for determining the Arm’s Length Price (ALP) of the international transactions. The TPO took note of the relevant clauses of the agreements entered into by the assessee with Nalco, USA and Nalco Pacific Pte Ltd., Singapore. After considering entire gamut of the relevant facts, the TPO held that the services availed by the assessee were in the nature of stewardship activity and not intra group services. This is how, he determined Nil ALP of the international transactions and proposed transfer pricing adjustment of Rs.17,21,93,000/-. The AO made such an addition. The ld. CIT(A) deleted the addition by holding that the services availed by the assessee were in the nature of intra group services and not stewardship activity. He further held the international transaction to be at ALP, resulting into the deletion of the addition. Aggrieved thereby, the Revenue has come up in appeal before the Tribunal in the terms indicated above.
We have heard the rival submissions and gone through the relevant material on record. It is common submission by both the sides that the issue raised in this appeal is similar to the one raised in the Revenue’s appeal for the immediately preceding assessment year, 2009-10. Except for increase in mark-up rate under the two agreements, both the sides fairly conceded, that nature of the services is unchanged. The appeal for the assessment year 2009-10 was fixed simultaneously with the extant appeal. During the course of hearing of the appeal for the immediately preceding year, both the sides made elaborate submissions. In fact, the parties adopted their submissions made for the earlier year insofar as the instant appeal is concerned.
This shows that the nature of services availed by the assessee from Nalco, USA and Nalco Pacific Pte Ltd., Singapore is similar to that of the preceding assessment year. We have passed separate order for the assessment year 2009-10 approving the view taken by the ld. CIT(A) to the effect that the services received by the assessee were in the nature of intra group services and not stewardship activity. Since the dispute in the instant appeal, as appearing from the ground extracted above, is only on the nature of the services, following our view taken for the immediately preceding year, we countenance the impugned order on this score.
It is made clear that the Revenue has challenged only the ascertainment of the nature of services by the ld. first appellate authority and not the ALP determination of the international transaction by the ld. CIT(A).
In the result, the appeal is dismissed. Order pronounced in the Open Court on 30th September, 2021.